2018 Guide to Great Lakes Lawsuits, Loan Forgiveness & Refunds

Do You Qualify for a Great Lakes Loan Forgiveness, Refund or Discharge?

Do you have a student loan being currently serviced by Great Lakes?

If you do, I’ve got some great news. You may be eligible to have your loan eliminated entirely via the Borrower’s Defense to Repayment Program, which is a program set up by the US Government to help borrowers get rid of debt when they’ve been lied to, defrauded, or treated illegally in some way.

This program is 100% legitimate, offered and backed by the United States Government, and NOT one of the common Student Loan Forgiveness Scams which have become so common in recent years.

In fact, Borrower’s Defense Against Repayment is the single most powerful Federal Student Loan Forgiveness Program that exists, as it allows you to completely eliminate outstanding debt, plus potentially qualify for refunds for any money you’ve already paid out on your loans, which is why I highly recommend that you pay close attention to how it works!

In this post, I’ll explain how you can get your Great Lakes loan forgiven. I’ll provide details about how the Borrowers Defense Program (BDAR) works, what Great Lakes has done that opens them up for BDAR Claims, what you need to do to fill out your application for a discharge, and how you can increase the odds that your application gets approved.

How Does the Borrower’s Defense to Repayment Program Work?

The Borrower’s Defense Against Repayment Program (BDAR) was created to help people who had been defrauded by Schools and Student Loan Servicing Companies eliminate the debt that never should have existed in the first place.

What’s that mean? BDAR allows you to apply for a discharge if you can prove that the school you borrowed money from, or the servicing company that you’re paying money to, has defrauded you in some way.

To apply for a BDAR discharge, all you need to do is fill out a bit of paperwork (the official BDAR Application), which will be submitted to the Department of Education. Someone at DOE will then review your claim and determine whether or not you deserve a complete discharge, or a partial discharge, and then they will inform you of their decision.

If your application is approved, you can receive 100% loan forgiveness benefits (wiping out whatever you still owe), and you may even qualify for a refund for any payments you’ve already made toward the balance of your loan.

BDAR is the single best program for wiping out student loans, though it’s not always a sure thing, so the most important point to realize here is that you aren’t guaranteed to get your debt discharged even if it seems like you deserve it.

That’s entirely up to the person at the Department of Education reviews your application, which is why it’s so important for you to pay close attention to this post, as I’m going to teach you how to increase the chances of getting your application approved.

How Does BDAR Work for Schools?

On the schools side, this is typically accomplished by proving that the school made false promises to you, false advertised, overpromised and underdelivered, or committed some other illegal or fraudulent behavior against you, which convinced you that borrowing money to attend their school was a good idea.

Basically, you have to prove that the school tricked you into taking out money to attend their education program, and if you can do that, you can qualify to have your loan entirely forgiven.

Tons of schools has been accused of committing fraud, and tons have had massive lawsuits filed against them. In fact, if you attend any of the following schools, you’ll want to click through to their pages on my website where you can get advice on how to get your loans from the school discharged via BDAR:

How Does BDAR Work for Servicing Companies?

On the servicing company side, the way to qualify for a BDAR Discharge is to prove that your servicer Great Lakes lied to you, committed some kind of fraud against you, gave you false information or obstructed you from doing something that would save you money.

Basically, you have to prove that Great Lakes did something illegal to make your loan more expensive, or that they didn’t fully inform you about your access to certain benefits, or gave you wrong information about something that ended up making your loan more expensive than it should have been.

What you’re going to be doing here is claiming that Great Lakes screwed you over, and that because they did this, you lost hundreds, thousands, or tens of thousands of dollars, so the company deserves to be punished by having to forgive your loan.

Just like we saw with schools, there are all sorts of Student Loan Servicing Companies who’ve been accused of committing fraudulent or illegal behavior against their borrowers, opening them up to BDAR Discharges, including:

Background on Great Lakes Student Loan Servicing

The Great Lakes Higher Education Corporation, headquartered in Madison, Wisconsin, is one of the biggest loan servicers in the United States, handling not only federal student loans, but also private loans as well.

Great Lakes isn’t just big, they’re absolutely enormous. According to their own website, they work with over 1,000 schools, more than 6,000 lenders, and more than 10,000,000 borrowers.

This is an absolutely gigantic company, managing over $51 BILLION dollars in student loans under the Federal Family Education Loan Program.

Why am I pointing out how big they are? Because I want you to know that if they’ve wronged you in some way, you shouldn’t feel bad about pursuing a student loan discharge against them, as you’re not going to be putting them out of business.

In fact, even if Great Lakes is forced to eliminate your debt, and provide you with refunds for all the payments that you’ve already made, they’re such a big company that they won’t even notice, so you shouldn’t feel bad about trying to get your loans forgiven.

And, while we’re at it, you should also know that you’re not the only one who’s had trouble with Great Lakes. The web is full of complaints and problems associated with this company, so you shouldn’t feel alone or be afraid to add your voice to the mix.

Common Complaints & Problems with Great Lakes Student Loan Servicing

Great Lakes is no stranger to complaints, as you’ll soon see.

While I’m sure that they’ve provided excellent service to millions of customers, I’m also aware that thousands or perhaps even tens of thousands of borrowers have had problems managing their Great Lakes loans, and the evidence for that is scattered all over the web.

Thousands of people have gone online to complain about things that Great Lakes did to them, going into extreme detail about how terribly they were treated, how incompetent some of the Great Lakes employees were, or how the company outright lied to them or scammed them in some way.

And this matters because this is the evidence that Great Lakes is not doing a good job managing all of their student loan customers, and it’s evidence that you can incorporate into your BDAR Discharge application to prove that you deserve to have your loan forgiven.

As you read through the list of complaints against Great Lakes, try to think if you’ve experienced any of these same issues. If you have, you’ll want to note them or write them down, because these are the sorts of things you’ll need to include in your BDAR Claim.

Common Complaints Against Great Lakes

Here’s a list of the most common, and most egregious complaints against Great Lakes:

Borrowers only thought they were on Auto Pay – Auto Pay is just what it sounds like, an automatic payment program. The way it should work is that Great Lakes turns on Auto Pay, gives borrowers a 0.25% reduction in their interest rate, and then withdraws the money for each monthly payment automatically. Unfortunately for some borrowers, Great Lakes turned off Auto Pay without their knowledge or consent. This caused the borrowers to miss a payment and lose the 0.25% interest rate reduction. In certain cases, this could have made a student loan far more expensive than it should have been.

Loan payments weren’t always applied to the right loan – Borrowers who paid more than the required payment amount expected that the extra amount would be applied to the loan with the highest interest rate. Unfortunately, in some cases, Great Lakes didn’t do that. One person even thought he was paying off a certain loan in full only to find out that the payments had been applied to another loan entirely, and of course, the way it worked out was better for Great Lakes, and way worse for him!

Delays in processing income-driven repayment plan applications – Certain student loan forgiveness programs require borrowers to be on an Income-Based Student Loan Repayment Plan. Unfortunately, in some cases, Great Lakes didn’t just take too long to process the applications, but they ignored them completely! Some people even applied for an IBR plan more than once hoping this would do the trick, but literally never heard back from Great Lakes, who is obligated by law to process these applications and get their borrowers enrolled in the related IBR Payment Plans in a timely fashion.

Borrowers were mistakenly placed on the wrong payment plan – Borrowers on a tight budget who had chosen a particular payment plan because it best suited their needs sometimes found that Great Lakes had put them on the wrong payment plan, significantly increasing their monthly payments, or the total outstanding balance of their loans! Several documented cases have shown that Great Lakes changed borrower’s payment plans without having been requested to make the change, and without even informing the borrowers that their plans were altered.

Great Lakes went after people who didn’t even have a loan – In a few rare cases, Student Loan Debt Collection Agencies working for Great Lakes contacted people demanding that they make payments toward a loan which never even existed in the first place. How this happened is a complete mystery, but it occured enough times that there are several complaints lodged online against Great Lakes for doing this, and it’s highly illegal (not ot mention immoral) behavior.

Great Lakes reported incorrect information to credit agencies – Great Lakes has also been shown to have reported borrowers to credit agencies even though their accounts were not delinquent, causing credit scores to decrease, This is obviously a problem, as credit scores are used to determine availability for new loans, access to financially-sensitive (often high-paying) jobs, and approvals for renting apartments or homes.

The Great Lakes Lawsuit

Amanda Lawson-Ross is one borrower who was negatively impacted by Great Lakes’s controversial student loan servicing.

Regarding her student loans, Amanda was on top of things. She had done her research and knew that the Public Service Loan Forgiveness (PSLF) Program entitled her to receive student loan forgiveness after making only 10 years of payments if she worked for either the US government or a non-profit.

She checked the details of the program, reviewed her specific case and determind that she would qualify for the benefit, took care of all her paperwork even asked Great Lakes several times if everything was on track for her to receive loan forgiveness. They assured her that it was. But then,, she found out that it wasn’t.

After four years of making payments, Great Lakes told her that not all of the loans she was paying on would qualify for the Public Service Loan Forgiveness program. If she wanted them all to qualify she would need to consolidate the loans and start over again from scratch. In other words, she was facing 10 more years of loan payments!

So, in October of 2017 she filed a lawsuit against Great Lakes accusing them of giving her false information about the eligibility of her loans for the Public Service Loan Forgiveness program.

Sadly, this is not an unusual case and here’s why the lawsuit is important: this is the type of evidence that can be used to qualify for a Borrower’s Defense to Repayment Discharge, as Great Lakes grossly failed to properly inform Amanda about the requirements of PSLF, basically costing her tens of thousands of dollars with their negligence.

If you’ve had a similar experience with Great Lakes, then you too are going to end up eligible to receive a student loan discharge via the BDAR Program, and you should fill out your application today!

How to Get Your Great Lakes Loans Discharged via Borrower’s Defense Against Repayment

As I mentioned above, the Borrower’s Defense Against Repayment program was set up by the US government to help borrowers who have been scammed, defrauded or otherwise treated illegally by their servicing companies.

The fact that there have been lawsuits against Great Lakes means that you, as a customer of Great Lakes, can use the program to receive not only student loan forgiveness, but potentially a refund as well for any payments you’ve already made.

When you apply for the Borrower’s Defense program you need to link your specific claims against Great Lakes to the lawsuit and to the common complaints floating around about Great Lakes.

In other words, it’s not enough to simply state that Great Lakes got into trouble with the law by doing such and such. You will need to show that Great Lakes did something illegal to you, personally.

Let’s look at the list of illegal activities Great Lakes has been accused of again. Remember, if any of these things happened to you, then you should definitely apply for the Borrower’s Defense program, and you can use these as the points of evidence for why you deserve to have your loans forgiven.

What Specific Illegal Activities Has Great Lakes Been Accused Of?

Great Lakes has been accused of a variety of highly immoral and illegal activities, including:

Misleading student loan borrowers into believing that all their loans would qualify for the Public Service Loan Forgiveness program, when this is clearly not the case

Placing borrowers on the wrong payment plans, failing to inform borrowers when changing payments plans, and doing so without any request from the borrower

Harassing people (via Debt Collection Agencies) who didn’t even have a loan serviced by Great Lakes

Dragging their feet when processing applications for Income-Based Repayment plans, or ignoring those applications outright

Removing people from Auto Pay without their knowledge, and without even informing them that they’d been taken off the automatic payment plan

Applying payments to the wrong loan, purposefully, when it suits their bottom line, and costing borrowers to owe more money as a result

Does any of this sound familiar to you? Again, if it does, then you have a good claim for a Borrower’s Defense to Repayment Application, and you should get one submitted as soon as possible.

Where Can I File My Borrower’s Defense Claim?

To apply for the Borrower’s Defense Program you’ll need to go through this wizard on the official US government website for BDAR.

Whatever you do, don’t file your claim anywhere else! There are a lot of scammers out there who promise all sorts of things, like that they can get your claim approved faster, guarantee it’ll work, etc., but these are all lies!

Where Can I Check the Status of My Application?

Your loan servicer is the one who processes the Borrower’s Defense application, which means things could get a little awkward between you and Great Lakes, considering that they’ll be reviewing your claim against them.

But don’t worry, because BDAR is a legal process and Great Lakes will have to follow the law by processing your application properly, then submit it to the Department of Education on your behalf, who will review and determine whether or not you deserve that discharge.

Unfortunately, Borrower’s Defense applications are taking forever to be reviewed by the Department of Education, partly because our Secretary of Education Betsy DeVos hates this program with a passion, and has been trying to kill it for some time.

Fortunately, she hasn’t gotten away with her agenda yet, and there’s still time for you to fill out an application, submit it, and get in line to have it reviewed.

Even if the BDAR Program is eliminated before your application is approved, you should be grandfathered in and be eligible for the discharge anyway, so get your application in as soon as possible!

Will I Owe Taxes on Forgiven Debt?

I hate to be the bearer of bad news but, yes, you will. The IRS considers all forgiven student loan debt to be taxable income. Here’s an example using numbers to help you better understand how this works:

Let’s say that you receive $100,000 worth of loan forgiveness through BDAR. You will need to include that $100,000 on your next years IRS Tax Filing, and If your income tax rate is 30%, that means that you’ll now owe the IRS $30,000.

The worst part about this is that the IRS doesn’t offer convenient monthly payment plans – they like to be paid in one lump sum, all up front. Who has that kind of money sitting around?

Nobody struggling with the burden of student loan debt is going to have that kind of cash on hand, which is why I’ve set up a new website called Forget Tax Debt to help people figure out how they can eliminate or reduce IRS debt, just like I do here for student loans.

Finally, if you have any other questions, please post them in the Comments section below and I’ll get you a response as quickly as possible.

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Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.

Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt, where he offers advice on paying off student loans as quickly, and cheaply, as possible. His new website Forget Tax Debt, offers similar advice to people with back tax problems.